NYU Stern Study Shows the Benefits of Status over Power to Cultivate Fair Managers

In other words, although power and status are often thought of as two sides of the same coin, they in fact have opposite effects on the fairness of people’s behavior.

Does focusing managers on the power they wield give rise to bad management? According to new research from professors at NYU Stern and Cornell, managers who have a heightened sense of their power treat others less fairly compared to individuals who see themselves as less powerful. But when it comes to self-perceptions of status, the roles reverse.

“Unfortunately, there is much less emphasis in organizations on highlighting issues of respect and prestige – factors that drive a person’s sense of their own status and would, therefore, encourage fairer treatment towards others,” says NYU Stern Associate Professor of Management and Organizations Steven Blader, who co-authored the recent study with Ya-Ru Chen of Cornell University’s Johnson School of Management.

“In other words, although power and status are often thought of as two sides of the same coin, they in fact have opposite effects on the fairness of people’s behavior,” says Blader.

The experiments placed participants in a wide range of roles, providing them with information about the power and status associated with their characters. Across these studies, the authors found:

Participants who had an elevated sense of their power behaved less fairly towards others and made decisions that reflected a weakened concern for fairness.

Participants who had an elevated sense of their status – and were thus concerned about maintaining their high status position – behaved more fairly towards others and made decisions that reflected a far greater concern for fairness.

“These results have important implications for managers, and for organizations more generally, since they help us understand the determinants of whether managers treat their subordinates fairly or unfairly,” explains Blader. The authors suspect that the push by organizations to exclusively emphasize things that focus managers on power (e.g., headcount, budget control, bonuses and a wide range of other economic factors) actually leads those managers to treat their subordinates less fairly. In contrast, the authors expect that if organizations emphasized focusing managers on status (e.g., what do peers, subordinates and superiors think of the individual), it would result in a far more positive impact on fairness and workplace relations more generally.